Copyright 2018 Albuquerque Journal
Albuquerque Journal (New Mexico)
The University of New Mexico Athletics Department has conducted financial business and operations "in an informal manner" that has elevated the risk for mistakes and improper behavior, according to a new report from UNM's Internal Audit division.
The report, released Monday, addresses many of the now-familiar issues covered by the media and by a 2017 special investigation by the state auditor, including the use of public money to pay private donors' expenses on a Scotland golf junket and buy nonemployees' tickets to the NCAA and Mountain West Conference basketball tournaments; overpayments to coaches; underpayments by UNM's marketing contractor; problems collecting payments for the use of Pit suites; and recurring budgetary turmoil wrought in part by unmet ticket sales projections.
The audit makes 20 separate recommendations for improvement - many of them multi-faceted - with No. 1 being the creation of a business operations manual for the department.
"The UNM Athletics Department does not always document or follow procedures for key operational processes to ensure it operates in an effective and efficient manner and that it complies with UNM policies and procedures and State laws," the audit states in its conclusion summary. "During the audit, Internal Audit noted findings of internal control deficiencies in business processes, account reconciliation, financial reporting, and non-compliance with UNM policies and procedures and State laws."
Athletics says it will develop such a business manual; in fact, Athletic Director Eddie Nuñez said his department is already addressing - or has already completed - many of the recommendations. His department tried to fix issues that came to light during this audit and the state auditor's 2017 investigation, he said.
"It was an assessment of our program - that's what we've got to take it as, (and) learn and grow from it," he said Monday.
The audit focuses on the 2016 and 2017 fiscal years, which predate Nuñez's arrival last fall.
He said vacancies in the athletics business office likely contributed to some of the issues, but improvements include the January addition of Chief Financial Officer Rob Robinson. Though the office is losing its accountant, Nuñez said the department is collaborating with the main campus and could rely on centralized services to pick up the slack.
"At the business office, we're good right now," he said.
The Internal Audit report recommended athletics conduct more regular reviews of revenues and expenses, indicating that a lack of frequent monitoring is contributing to the perennial budget shortfalls. The department has finished with a deficit eight of the past 10 years - and is on pace for another shortfall this year - and has an accrued deficit of $4.7million to the UNM reserves, an amount it is scheduled to start paying back in 2020.
Revenues fell $1.1 million short of the original budget in 2016, a problem attributed largely to making $680,000 less in ticket sales than projected.
But the report notes that athletics has frequently waited until year's end to reconcile some accounts.
"Original budgeted expenses are based on projected revenues and accruals, and are not closely monitored or adjusted throughout the year to reflect projected revenue shortfalls. This increases the likelihood of over-expended budgets, misstatement of revenues for financial reporting and year-end shortfalls," the report states.
It also recommends organizing the budget so major costs like coaching salaries and athlete scholarships are recorded by individual sports. UNM's administration has proposed eliminating some sports in 2020 as a way to cut costs but has had difficulty isolating the exact costs of operating each sport.
Nuñez said the budget design moving forward will provide a clear picture of each program's revenue and expenses.
The audit also found that athletics:
Incorrectly recorded $500,000 in revenues over a two-year period instead of spreading it out over the seven-year span of the contract.
Neglected to budget for $614,000 in expenses related to a professional bull rider event in 2017.
Overpaid former men's basketball coach Craig Neal $144,216, baseball coach Ray Birmingham $39,601 and men's soccer coach Jeremy Fishbein $1,186. (The coaches have all repaid the excess amounts.)
Received a total of $256,000 less than it should have from marketing partner, Learfield Sports, in 2016 and 2017 based on changes outlined in an amended, but unsigned, contract. (Nuñez said an amended contract was recently signed.)
Failed to have signed agreements for all courtesy car recipients or a written policy for their use. (Athletics now has car recipients sign agreements.)
Purchased 113 NCAA Final Four tickets worth $35,101 between 2011-2017 and paid $11,190 in lodging costs - sometimes to cover donors - but only received $16,426 in reimbursements, which the audit says may violate the state's anti-donation clause;
Did not fulfill the donor requirements of certain scholarship funds, awarding $8,891 and $8,755 to athletes who lacked the requisite GPAs;
Has only collected $191,114 of the previously reported $432,641 in uncollected Pit suite debt, having determined $184,027 is uncollectible for reasons like a lack of a formal sales agreement;
Had inadequate documentation for seven cash advances worth $8,330 for football player massages.
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